Data Exchange Platform vs. Tributech DataSpace Kit
The ChallengesLet’s first take a look at the initial situation and the challenges you will face if you want to digitally connect a supply chain:
Dependence on platformsWhen connecting several companies in a supply chain, it can be assumed that each participant has reached a different degree of digitalization or a different maturity level. If you choose a Data Exchange Platform, you must first find out the lowest common denominator of all stakeholders and then decide on a system whose minimum requirements are eligible for everyone. This is where your dependency on a platform begins – a topic that will be dealt with more often in this article. You also need to decide which company in the supply chain will manage and therefore control the platform – a role that requires a lot of effort but also brings power. Prepare yourself for difficult negotiations.
Letter of approval for data exchangeThe bigger and more important your business partners are compared to your company, the less willing they are to release or disclose data. Especially with sensitive data, this willingness is often practically non-existent. If you opt for a Data Exchange Platform, you face the challenge of finding a system that maintains the basic trust of all participants. After all, in the worst case, the wrong choice can have fatal consequences. With a Data Exchange Platform, you always create a potential single point of failure for yourself – once the platform has come to a standstill, your entire supply chain will. Let’s be honest: Do you really want to put this responsibility on a single external vendor? But the even greater threat lurks in the area of security. With a Data Exchange Platform, all your supply chain data is stored centrally at an external provider. It’s hard to imagine what would happen if a data breach takes place here. And that’s really the biggest downside of Data Exchange Platforms: you don’t have the security of your own sensitive data in your own hands. Do you think you can have peace of mind?
Costs and sustainabilityAs long as you are committed to end-to-end solutions, you are likely to have to work with multiple platforms for integrating multiple suppliers and customers. In addition, it is highly likely that you will only be able to exchange specific data such as documents via these platforms – only a few platforms allow the exchange of sensor or process data. This means that several solutions must always run in parallel in order to cover the entire data exchange. A future-proof solution looks different – and it is not particularly cost-saving. We at Tributech strategically decided to design our solution with distributed architecture. In the following, we will explain what made us make this decision.
Comparison Data Exchange Platform vs. Data Space Kit
Central storing and routing of data vs. peer-to-peer exchange of dataData Exchange Platforms are mostly designed with central storing and routing of data. This results in the above mentioned problems regarding the risk of a data breach and has a single point of failure. With our DataSpace Kit, data is transferred peer to peer from company to company and is not stored or routed centrally anywhere. If a participant in the chain fails, there is never a risk that the entire system will come to a standstill. All processes that do not directly affect the participant can still be carried out. In addition, with a data breach, only data from a single participant can be disclosed – so the extent of an external intervention can never be as enormous as with central storage.
One technology vs. best of breedIf you opt for a Data Exchange Platform, you will be dependent on a single provider. Not only do you buy the right to use its platform – you also buy its sense of security, its support and above all its innovative spirit. Usually, this can be a bit frustrating if you have an idea to extend your system. New functions are usually only integrated by the providers when they are requested or even only when requested by several customers. So it can sometimes take a very long time until your innovative ideas are implemented. With a best of breed approach, you combine the best technologies and vendors for a specific task or feature and therefore you are not dependent on a single provider. You don’t have to adapt to one system, but rather integrate individual functions, even from different providers, into your existing landscape. So you can react quickly to new ideas or requirements and always adapt your system to your wishes by switching a specific technology or vendor without “harming” the rest of the system to much. You are not dependent on any decisions that you cannot influence yourself.
Interoperability & data sovereigntyData Exchange Platforms are usually very limited regarding data formats. A system mostly allows only certain file formats and thus severely restricts your cooperation with your business partners. Additionally, in such a system, there is always a single entity that controls the entire platform. A decentralized DataSpace Kit gives you the full power of decision over your data and allows you to share exactly that data, in the required data formats, that is really needed for the supply chain.
The security issueWith Data Exchange Platforms you always bear the associated risks due to your dependence on one provider – first and foremost a possible data breach and single point of failure. With a decentralized system, such as our DataSpace Kit, these risks do not exist. Data is always only exchanged peer to peer, which is why the functionality and security of a system can never depend on a single entity. As a partner, you always retain data sovereignty and can decide for yourself which data is released at which point in time.
ComplexityOf course the design of a central Data Exchange Platform also has advantages. Single platforms are basically easier and faster to set up as you only have one technology and vendor compared to combining several in a best of breed approach. However, with our DataSpace Kit we can significantly reduce the setup costs and complexity of setting up a decentralized solution by offering an out-of-the-box solution for connecting systems and transferring data between them. Therefore, by combining the advantages of both approaches we can offer our customers high flexibility for their best of breed approach without the trade-off of increasing complexity and costs compared to a central platform approach.
Decentralization – a decision of security & data sovereigntyAs already mentioned, based on the above described topics the decision for the modular system design with peer-to-peer approach for the data exchange was very easy for us as Tributech. While we strongly discourage following any hype in decentralization and blockchain, the case for peer-to-peer data exchange, data security, and data sovereignty solutions speak for itself. The most important aspect for us is the significant increase in data security and system stability – because an entire system should never stand or fall with a single party.
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Alexander Sztatecsny, who has been working in different areas of Digitalization across the value chain for most of his business life, has recently joined the team of Tributech as COO and Managing Partner and will work with the team to elevate the business to the next level.